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Introduction to Indirect Method

Is depreciati...

Question

Is depreciation an asset or liability?

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Solution

Depreciation is anything but an asset since the balances recorded in the accounts don’t address something that will create monetary worth to the business over different accounting periods. All things considered, accumulated depreciation or devaluation addresses the measure of financial worth that has been consumed before.

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MCQs on Depreciation

What Is Depreciation?

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Similar questions

Q. State whether the following Statements are True or False

1. There is need to provide depreciation if it is maintained with care.
2. Depreciation cannot be provided in case of loss in a financial year.
3. A Specific reserve can be created for any purpose.
4. Capital Reserves are not freely distributed as profits.
5. Under the written down value method depreciation is calculated on the original cost of an asset.
6. Depreciation is the process of valuation of asset.
7. Depreciation is a non-cash expense.
8. Secret reserves are disclosed in Balance Sheet.
9. General reserves is created to meet contingency liability.
10. Depreciation is charged only on fixed asset.

Q. Give one example of each of the following transactions:
(i) Increase in an asset and a liability.
(ii) Decrease in an asset and a liability.
(iii) Increase in assets and capital.
(iv) Decrease in assets and capital.

Q. Is debetor an asset or liability?

Q. An amount not including "Any amount written off or retained by way of providing for depreciation, renewals or diminution in the value of assets or retained by way of providing for any known liability" is called ____________.

Q. "Any amount written off or retained by way of providing for depreciation, renewals or diminution in the value of assets or retained by way of providing for any known liability" is called ____________.

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